Gray’s Anatomy of Defense Buys: Don’t Just Sign and Wait
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On May 20/13, the UK MoD’s Chief of Defence Materiel Bernard Gray talked about the Astute program experience during a Public Accounts Committee hearing concerning carrier strike. Actually, he talked about the concept of buyer oversight vs. contractor-directed programs in a much more general sense.
“Bernard Gray: …While I appreciate that the defence industry will quite often say that it wishes to be left alone, thank you very much, my experience is that that is not on the whole a good idea…”
“It is fair to say that on most occasions when I have pushed on specific issues, they are not as well covered off as they should be. If I just let a contract and walked away and invited defence contractor A to get on with it and “Do just please drop by and deliver the equipment at the end of it and I’ll write you a cheque”, I am unlikely to get that equipment.
Q102 Ian Swales: Why?
Bernard Gray: Because their control of programmes is not all it might be.
Q103 Ian Swales: So we have to get involved in controlling the programmes of our suppliers? Is that it?
Bernard Gray: If I can take you back to the most salient example of this, in the Astute programme we did what you suggested. It was a disaster. From 1996 to 2003 we let them get on with it. We had a contract and that is what we cared about. In 2003, it almost broke BAE Systems. It cost them hundreds of millions of pounds. We then had to step back in, reformulate the programme and effectively recuperate the whole of our submarine-building activity, which is something that is only beginning to come right some 10 years after that disaster…. My point is that the happy-go-lucky world of us writing out a contract and then allowing industry to get on with it is not one that I live in.”
Sources: HC 113 Public Accounts Committee Session 2013-14, “Public Accounts Committee – Minutes of Evidence” | See also DID’s in-depth coverage, “Astute Buy? Britain Spends Big on its Next Fast Submarines“.
